But trading volume was light, indicating that many vacationing investors were taking a break from stocks.

The New York Stock Exchange saw its fifth-lightest volume day of the year, while the Nasdaq Stock Market registered its sixth-lightest day. The low volume tallies made it the skimpiest trading session for both markets since the half-day before the July 4 holiday.

Still, those investors who remained active seemed enthusiastic about stocks. The Dow Jones Industrial Average, fueled by a late-day rally, jumped 1.35%, or 148.34, to finish at 11176.14, continuing the index's push beyond the 11000 milestone, which it reached on Friday for the first time since late April.

Still, traders cautioned that investors shouldn't read much into Monday's strong gains. "August is probably your biggest vacation month, and the earnings reports mostly finished up in July" so there's little news on the horizon, said Tim Grazioso, manager of Nasdaq trading at Cantor Fitzgerald.

Bonds rose. The dollar was mixed.

Investors who weren't on vacation put worries about a Federal Reserve interest-rate increase behind them, traders said. And while several important pieces of news will be released this week-including a third-quarter earnings report from
Hewlett-Packard Co.
expected Wednesday, and July's consumer-price index report also due out Wednesday -- the fading fear of the Fed means Monday's low volumes and bullishness could continue for the rest of the week.

Traders said the sluggish trading helped magnify a late-day rally in both Big Board and Nasdaq stocks. Around 781 million shares changed hands on the NYSE, compared with an average this year of about a billion a day. Nasdaq volume Monday, meanwhile, was 1.16 billion shares, compared with an average of about 1.58 billion shares daily.

Gains in bricks-and-mortar sectors like financial services and retail are helping to push the Dow industrials, in the red for much of this year, back toward positive territory for the first time in 2000. The blue-chip index now is down only 2.8% from its Dec. 31, 1999, close. (The Nasdaq composite, in contrast, remains down 5.4% for the year.)